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The Farmers’ Right to Guaranteed Remunerative Minimum Support Prices for Agricultural Commodities Bill, 2018

FOCUS

This is one of the two
private member’s bills that Raju Shetti, Member of Parliament from Hatkanangle
constituency in Kolhapur district, Maharashtra, introduced in the Lok Sabha on August
3, 2018. (The other is The Farmers’ Freedom from Indebtedness Bill, 2018.) Shetti,
a farm leader and the founder of the Swabhiman Paksha, is also a member of the
All India Kisan Sangharsh Coordination Committee, an umbrella organisation of
over 160 groups and unions of farmers and agricultural workers.This bill proposes that
every farmer has the legal right to a guaranteed remunerative minimum support
price (MSP) for the sale of his/her agricultural commodity. The bill also
proposes a redress and compensation mechanism for farmers and traders, the regulation
of prices offered by traders, and rules for public authorities for accountable
functioning.

The bill states that the
prices farmers get for their commodities do not cover their input costs or help
them meet their basic needs. Inadequate returns on investment have led to the
suicides of tens of thousands of farmers each year.

The AIKSCC and citizens’
groups are demanding that both these bills be discussed and adopted in a
special 21-day session of Parliament dedicated to the agrarian crisis.

FACTOIDS

Who is a farmer according to this bill?

Section
2(g) of the bill defines a farmer as a person who grows crops or other primary
agricultural commodities; he or she may or may not own land. This definition
also includes all agricultural ‘operational holders’, cultivators, agricultural
labourers, sharecroppers, tenants, poultry and livestock rearers, fish workers,
beekeepers, pastoralists, non-corporate planters and planting labourers, forest-produce
gatherers, women farmers, and farmers’ groups, producer cooperatives or self-help
groups cultivating collectively-owned or leased land.

What is the guaranteed remunerative minimum support
price for any agricultural commodity?

The bill
says that the guaranteed MSP should include at least a 50 per cent profit margin
over the comprehensive cost of production. This was also one of the recommendations
of the National Commission on Farmers, which submitted its reports on the
agrarian crisis to the central government between 2004 and 2006.

How should the comprehensive cost of production be
estimated?

The bill
says it should cover:

Paid-out costs, which include the costs of human, animal and machine labour; annual
maintenance costs of animals and machinery; expenses on inputs such as seeds,
fertilisers, manure, pesticides, insecticides, weedicides and irrigation;
depreciation on implements and farm buildings; land revenue and other taxes;
rent of leased land; interest on credit obtained; insurance premiums; and
processing, transport and marketing costs.

Imputed costs that include the cost of family labour (at wage rates for that area);
rent of owned land; interest on fixed and working capital; a risk margin of 10
per cent over the cost of cultivation per hectare; and managerial costs.

Projected costs, calculated using a Composite Variable Input Index that is based on the rate of inflation of different inputs. This should be applied to fixed costs and to any other costs resulting from the increase in the use of a particular input.

What are the Central Commission and the State Commission?

The bill says that the central government must set up the Central Farmers’ Agricultural Costs and Remunerative Price Guarantee Commission to recommend guaranteed remunerative MSPs that include at least a 50 per cent profit margin over the comprehensive cost of production. The Central Commission must also monitor the prices being realised by agricultural commodities, and recommend that the government regulate the costs of agricultural inputs.

The State Farmers’ Agricultural Costs and Remunerative Price Guarantee Commission must be set up by the state government. It should recommend the MSPs of agricultural commodities of the state to the Central Commission. It should also suggest higher MSPs to the state government and a bonus over and above the MSPs. It must also maintain a fund for paying compensation to farmers who are denied the guaranteed remunerative MSP or who are forced to wait for payments from buyers (including government procurement agencies) for the sale of their agricultural commodities.

What does the bill say about redress for grievances and compensation for farmers?

The State Commission should constitute a three-member committee at the taluka level to address any complaints by farmers. A farmer who is not paid the guaranteed remunerative MSP by a trader is entitled to compensation equal to the difference between the MSP and the price obtained for his agricultural commodity from the trader. For delayed payments from buyers (including government procurement agencies), a farmer can get a compensation of 15 per cent of the total value of his/her agricultural commodity for every month of the delay.

What are the offences and penalties mentioned in this bill?The state government must ensure that the offer price or auction of every agricultural commodity begins at the guaranteed remunerative MSP in all agricultural markets. According to this bill, any trader (including one in a contract farming agreement) who purchases a commodity below the guaranteed MSP or refuses to buy it at the MSP, commits a cognisable offence. The trader must pay a penalty for this offence and can be imprisoned for a period of three months to a year.Any agreements (oral or otherwise) between purchasers/traders or commission agents that limit, control or suppress the sale prices of agricultural commodities (which, in turn, adversely affect the MSP) are also illegal and can led to penalties or imprisonment.Finally, the State Commission can find any public servant or authority guilty of not initiating action against traders for purchasing agricultural commodities below the MSP, intervening in the market, or not providing compensation to farmers. In such cases, the person can be fined one month’s salary and imprisoned for six months.